Buying a new car online gets easier

The country's largest dealer group experiments with a system that lets people buy a new car and trade in their old one entirely on the Web.

By Peter Valdes-Dapena, CNNMoney.com staff writer

November 7 2007: 12:44 PM EST

NEW YORK (CNNMoney.com) -- AutoNation wants to take online car-buying all the way to the end of the road.

Instead of just offering a price online, the country's biggest auto dealer is guiding selected buyers through the entire purchase - including arranging the trade-in and delivery of the new car - without them ever having to set foot in a dealership.

About 60 percent of new car shoppers already use the Internet to research cars, according to Jupiter Research, but only about five percent say they're interested in actually completing the sale online.

Web sites like Carsdirect.com automate the price negotiation process, allowing customers to get a firm price but, ultimately, the buying process is finalized by one of its partner dealerships. And it's up to customers to arrange the trade-in or sale of their current car.

At TeamDirect.com, a Web site for some of AutoNation's Atlanta-area car dealers - this is a test process currently involving only Atlanta-area dealers -customers can search dealer inventory and click on a car they're interested in. The resulting "Details" page will list the car's suggested retail price and the dealership's "online price." In theory, there is no negotiation in the online process.

Next to a picture of the car and the price, there's a blue button that says "Buy Direct," for those willing to commit right away.

Customers then fill out an information form and get a call from an AutoNation representative. The Web site explains that the call will be from "a specially trained vehicle specialist who does not work in the dealership."

For shoppers who aren't quite ready to buy a car sight unseen, there are links to, among other things, "Value your trade-in" or "Apply for credit." Customers can also schedule a test drive using an online form.

Both the "credit" and "trade-in" links ultimately end in a form that sends contact information to AutoNation. Again, you've been gently started on your way to purchasing a car.

Once everything's done, customers can opt to have the car delivered to their home or office. The trade-in can be dropped off at the dealership or at a convenient location. AutoNation will accept the online valuation for the trade-in provided the customer has accurately described the vehicle's mileage and condition, said Maroone.

Moving the car buying process, as much as possible, out of the dealership can have huge advantages for customers, said Phil Reed, consumer advice editor for the automotive Web site Edmunds.com, provided shoppers are careful and aware of what they're doing.

"I think that the auto business can really benefit from new sales practices," he said.

Discussing prices with dealers over the phone or through email can allow customers to take their own time to assess the offers and do more research.

The vast majority of car buyers still cut a deal the old-fashioned way, said Reed, which means sitting down at the dealership - often more than one - to negotiate a price in person, a process that can take hours in a single stretch.

"There's just this ingrained feeling that that's what car buying is and it can't be avoided," said Reed.

But customers can already buy most new cars without going to the dealer in person, he said. Most dealerships now have salespeople whose job is to deal with customers who want to negotiate a deal by telephone or email.

Customers have to be careful not to buy a car out of convenience, without first researching alternatives, said Reed.

Rather than accepting a set price from AutoNation, CarsDirect.com, or any Web site, for example, consumers should check general market prices at Web sites like Edmunds.com and KBB.com, Reed said, as well as getting competing prices from other dealers.

And no one should ever buy a car he or she has not personally test driven, said Lauren Fix, author of "Lauren Fix's Guide to Loving Your Car."

You shouldn't rely on reviewers, even ones whose opinion you respect, to decide whether a car is right for you, Fix said.

"Seating comfort and visibility are completely different from you to me and anybody else," said Fix.

Also, always check with your local Better Business Bureau before buying a car from any dealership, she said, to make sure the store doesn't have a long list of complaints.